With increased attention on healthcare regulations, RxDC reporting has slowly become a common topic of discussion as an ongoing exercise for employer-sponsored health plans. An outcome of the reporting requirement has exposed data gaps and accountability challenges in pharmacy data flows between employers, PBMs and third-party administrators (TPAs).
The Basics
Under the Consolidated Appropriations Act of 2021 (CAA), employer-sponsored health plans must annually submit data on prescription drug spend and utilization to the Centers of Medicare and Medicaid Services (CMS), which collects the RxDC reporting on behalf of the Departments of Health and Human Services, Labor, and Treasury, and Office of Personnel Management (CMS).
The legal responsibility ultimately lands on the plan sponsor, particularly for self-insured plans. However, PBMs and TPAs have been stepping in to provide support or to even final reporting submission.
The Why
The RxDC reporting exercise was intended to serve as an aid to federal agencies, allowing for prescription drug and healthcare spending monitoring. Over the years, federal agencies have made changes to the reporting requirements, including a more extensive filing of the pharmacy benefits data (files D3-D8) mirroring the same level of medical data detail (file D2). Data can range from top medications by cost, therapeutic classes, medications by dispensing frequency, monthly premiums, rebates and utilization metrics.
The Pain Points
Because of such a widespread reporting requirement, inconsistencies are still being worked out, including data formats, rebate reporting and vendor vs. plan-level submissions. Despite the importance of RxDC reporting, employer fatigue is also growing. Navigating the challenges of coordinating across multiple vendors, possible overlapping surveys and data validation has become time-consuming on top of regular tasks. Oftentimes, preparation for submission prior to the June 1 deadline starts at the beginning of the new year.
The Future
Although cumbersome, the reporting has been associated with ample feedback, regulators have discussed the purpose and benefit of the RxDC data serving as a fiduciary tool, including its relevance with future policies addressing PBM oversight, rebate reform and prescription drug affordability initiatives. With PBM transparency pressure rising, this can serve as a tool specifically around compensation transparency, rebate negotiations, spread pricing arrangements and any other miscellaneous payment retentions.
